(Des Moines) State Senate Rich Taylor of Mount Pleasant helped pass a $250 million commercial property tax cut on Monday, April 15. Senate File 295 was approved on a bipartisan vote of 29 to 21.
“This legislation cuts commercial property taxes for every Iowa business,” Taylor said. “This approach cuts taxes from the bottom up, meaning most of the benefit goes to local small business owners, the biggest job creators in Iowa communities.”
Commercial property owners currently pay taxes on 100 percent of the assessed value of their property. That’s about twice what residential property owners pay. Under the Main Street Tax Cut, the effective property tax assessment on 80% of Iowa commercial properties, those valued at $324,000 or less, will drop to the residential level.
“State dollars will replace every property tax dollar that used to go to schools, local governments, and community colleges without an increase in residential property taxes,” said Taylor. “Senate File 295 is the only commercial property tax cut that protects homeowners from an increase in property taxes.”
Under the “Main Street Tax Cut,” $50 million a year will go into a new Business Property Tax Relief Fund beginning July 1, 2014. The permanent, on-going appropriation will grow by $50 million each year that the state’s revenue increases by at least 4 percent. Once the $250 million goal is reached, the annual investment will be maintained.
“Over the years, Iowa’s local property tax system became a serious barrier to new jobs and businesses,” Taylor said. “The Main Street Tax Cut will lower that barrier.”